Government policies dictating bauxite’s future

Date: September 7, 2017

This edition, we take a look at the various governmental policies setting the agenda
in key bauxite mining nations, then consider the impact of Chinese environmental and supply-side reforms
on demand and, ultimately, price.

Any hopes of the mining moratorium being lifted in Malaysia have been scuppered, with the government extending the mining ban to 31 December 2017 in order to clear existing stockpiles. This has also been seen as a reactionary populist move ahead of the upcoming 14th general election. Illegal mining of bauxite has hampered the efforts to reduce the environmental impact and clear the backlog at the primary port.

As of December 2015 (one month prior to the mining ban), the major Kuantan Port had 5.4 million metric tons of bauxite in stockpiles. During the following 18 months, 5.8 million metric tons of bauxite were exported, with significant stockpiles still remaining. This indicates that allegations of clandestine mining are well founded. Furthermore, one-off permits have been auctioned off by the ruling family to the highest bidder, adding to the unreported output.

22 November 2017 marked the fifth National Mining and Related Industries Day. This important day was celebrated with a hugely enjoyed gala dinner in Sydney. Good evening distinguished guests, Ministers,…